Deflated?

After decades of inflation, our charts have done an About Face. We've officially gone into a period of Deflation for the first time in 50yrs, with prices falling 0.1%. See what the FT had to say here

So what does this mean? Deflation means prices in general are taking a tumble. Every pound in our pocket will go that little bit further.
So far it's music to our ears right? Lower prices, more money, what's not to love?
Well..

Long term deflation isn't so rosy. If this period of economic nosediving continues we will be looking at lower wages and possible peaks in unemployment, whilst our personal debts will remain as high as ever - which could summon bad news for households.

Let's backtrack a moment.

Last week the CPI (Consumer Prices Index) registered a negative reading. This measure looks at all our consumer goods, food, transport, even medical care and puts them into a metaphysical basket. This basket is then valued, then the value is measured. In real terms, this negative figure mean that prices have steadily fallen since April 2015; not long of course, but it tells of a trend and may signify a period that we are about to enter.

This measured value is intended to inform us as to how our vital products and services have altered in cost over time. Usually the value is positive and our goods and services have proven to become steadily more expensive over the years. Which is why this current negative figure is so intriguing; we haven't had a downturn like this since WW2.

But we all buy different things, so this basket may prove problematic. For example, food costs have decreased 3.2% since April last year, yet liquid fuel prices have tumbled a massive 26%. If we look to education, that has risen by 10% - so depending on what your set up is, it's really a game of swings and roundabouts. Historically inflation has always favoured the top 40% of households, meaning - you guessed it - the poorest in society are inevitably hit hardest.

What does this mean for my bank balance

Inflation usually works as follows; CPI increases and inflation goes up 2%, and at the same time your pay increases 2%. Not so great news as that pay increase means little; the items you buy and the money in your pocket all remains the same. When (as we've seen in the public sector) pay is not increased with inflation, workers are hit hardest but that is a whole other blogpost. With deflation the money in your pocket is worth more, as prices fall. So far, so good-bank-balance.

And this is pretty sunny, for the time being. But what is worrying is the prospect of continued, long term deflation. Once you pop, you can't stop. This deflation measure comes after several years of falling inflation which led to tumbling oil prices - sending shivers down the spine of any dedicated environmentalist *puts hand up, eyes watering*

So it's not so good?

What we need to consider here is how the economy will respond to continued deflation. First is the consumer. Is it likely that a consumer will constrain their spending habits today, on the proviso that products in the near future will be cheaper? Likely but not too likely. Luckily we're so driven by consumption that spending habits aren't likely to change any time soon.

Next we look at supply chains. If products and services are being sold for less, the return on investment will be less, ever decreasing circles. This may result in falling rates of investments, or more worryingly, falling costs. i.e. Labour costs. i.e. Jobs. *gulp*

So the job market will shrink. Salaries will slim down, wages will wane. Eventually long periods of deflation will result in people being paid less, or exiting the job market. Worse still this will mean people will have less money to spend, pushing our prices down further and increasing deflation measures. Ever decreasing circles (again).

And the most worrying part? Debt. because debt, personal debt, national debt, any form of debt won't change. Won't budge at all. So family outgoing will shift, with the lion share being used for debt repayments. We are one of the most heavily indebted countries in the world (thanks private banking sector!) and this debt will become even harder to shift if we enter a period of severe deflation. Japan is country that has battled with deflation since the collapse of the stock market in the 90s. A cautionary tale..

What's next?

Well the bank of England are insisting that this period of deflation will only be short lived, and I do hope Mark Carney is right. My only reservation about this is Productivity. Which has been pretty low here in the UK since 2007; and if we are to beat deflation productivity needs to soar.
Secondly, our job market isn't resilient enough to overcome deflation. The existence of zero hour contracts and similarly low paid, short term contracts presents a framework that can easily be manipulated and corrupted. Employers can reduce hours for staff at the drop of a hat, in order to save a few pennies. It's a weak system already and will only be made weaker by deflation.

We can simply overcome this by implementing a few measures; which I'm proud to say are Green Party policy. First of all increasing the National Minimum Wage and ending the punitive 1% pay freeze for public sector workers would improve matters immediately. However with Cameron and Osborne at the helm of our Nation, it seems the political landscape will yet again have our backs against the wall.

Austerity - The People's Assembly March in Manchester

It's more than just a buzzword. Austerity is a snarling beast, gripping and pinching, doggedly weighing us down.

How does it manifest? How can it be stopped? The People's Assembly (Against Austerity) are leading the fight against this entity. On 23rd May I joined friends and comrades to deconstruct austerity, to protest, to sing, to shout about what it is, what it has done and what we can do to overcome it.

Manchester is a socialist city. It sits firmly within history as being the home of social uprising.
The home of co-operative politics.
The home of true Labour.
And on this day, Piccadilly gardens roared an indignant roar.

Around 2000 people listened to stories of the bedroom tax, of benefit sanctions, of ILA and PIP, of death, of suicide. At times we cried. At times we cheered. We sung protest songs not performed since the 70s, and the atmosphere felt distinctly Vintage. Every corner of society was joined in an equal chorus of celebration and anger. United.

And as the sun began to start its decent, as the crowd began to dissipate, thoughts turned to what next? We've shouted and we've sung but; What Next.

Next; we organise.
Next; we march to Parliament.
Next; we win.

Because this fight won't end tomorrow. Our petitions won't be heeded and our protests won't make headline news. We will be kettled on the streets and in the Daily Mail.




But we are growing strong.
We are growing loud. We are a growing a network of people, willing to mobilise, willing to organise, willing to sit down at the table with our leaders and calmly say 'No More'. We are making ourselves known, on councils and committees, in newspapers and boardrooms and in five years time?
We will win.
Austerity will be over.
And we can rebuild.

22nd European Green Council Zagreb

Taxiing along the runway as I was reading the proposed amendments for the upcoming 22nd European Green Party Council, a blonde haired gentleman nudged me on the arm and said ‘we’re heading to the same meeting’. He was from Socialistisk Folkeparti (the Danish Green Party – in Denmark, Greens are Red) and introduced me to his colleagues. We began to discuss the ins and outs of the recent UK election and I began to realise that the European Green Party Council in Zagreb will be a truly international affair.

Myself and Gina Dowding from the Lancaster Green Party

The council took place from 15-17 May 2015 on the outskirts of the city centre of Zagreb, nestled in a hotel situated amongst a hotchpotch of soviet-style office buildings and apartment blocks. The delegation, formulated of over 40 member states boasted representation spanning the entirety of Europe; from Scotland to Slovenia, delegates milled around the hotel lobby, quaffing coffee and indulging in endless conversation about The Green Vision.

Council was opened with a rousing speech from Reinhard Bütikofer, co-chair of the EGP, rekindling memories of his great speech at our own conference in March earlier this year. Next came a word of welcome from Mirela Holy, leader of OraH, the Croatian Green Party and our hosts for the weekend. She laid out the problems ORaH face, with the growing possibility of oil and gas drilling commencing in the beautiful Adriatic sea. Then as a maelstrom of press fired into action, the President of Croatia, Kolinda Grabar-Kitarović took to the stage; anointing our event as an almost regal affair. After the applauds and applause, business began.

The first major discussion was entitled ‘Green Strategy: Ideas To Change The EU’. Having just finished our own election campaigns, the English contingent were keen to be involved. The discussion was born out of the slightly disappointing results in the previous EU elections and, looking forward, how we can improve our standing in Europe in the years to come. What I found most interesting were the discussions around ‘establishmentarianism’ by which many of our sister parties in western Europe have found being a sizeable part of government has ultimately resulted in them being viewed as an ‘establishment’ party; something I think we steer well clear of here in the UK – if only thanks to our retrograde electoral system.

And that electoral system, First Past The Post, never failed to garner responses of faint disbelief from our european comrades. ‘But that’s so undemocratic!’… ‘People must feel underrepresented!’ … ‘That system is so silly!’ Just a few of the comments I received when explaining the system under which we elect our government.

GPEW International Co-ordinator Derek Wall and Emily Blyth (right) speak with European Green Party committee member Steve Emmott.

Populism was a recurring theme both in the plenary sessions and the fringe ‘parallel’ sessions. Initiated by the rise of leftist parties such as Syriza and Podemos, much discussion centred around how we, as a Green Family, can build our support in the current political climate and maybe harness the strategies used by such parties. However populism has a much darker side; speaking with delegates from Hungary, France and Greece, the rise of the far right is a worrying trend across Europe. A perfect storm of high youth unemployment and wily, populist parties, with violent right wing agendas, have led to a growing trend of fascism and anti-immigration, most worryingly amongst young voters. The Green Party of England and Wales, most notably the Young Greens have done a wonderful job here in the UK in galvanising youth movements to consider Green Politics and maybe anti-fascist and anti-austerity groups have large youth followings. A stark contrast when listening to our friends on the continent.

The main purpose of the council was to elect a 9th committee member. Candidates came mainly from the eastern half of Europe and each made great presentations, showing that the green vision extends well beyond the confines of the west. After a suitably efficient voting session (great use of digital voting – something I’d love to see at GPEW conference!) Maria Peteinaki from Greece was voted in after a high race with the Hungarian candidate, Peter Ungar. Maria is an architect in Athens and told me how she faced first hand the fall of the economy and running her own office has been more difficult than ever. She told me how she had helped with many grassroots projects across the city, and highlighted how important community projects can be in austerity ridden times. However she went on to say that the Syriza government have given many people hope, buoyed by an antiausterity rhetoric. Business in her own field has started to pick up, with many of her jobs being in the renovation sector. A recurring theme when speaking with delegates was the emphasis European governments have put on renovation projects as opposed to brand new building endeavours. However a quiet walk around Zagreb tells a different story, with many buildings falling into dilapidation as the Croatian economy enters hard times. Indeed much of eastern and southern Europe have suffered under repeated austerity projects and the continuing rise in unemployment shows little signs of success. As we approach another five years of austerity here in the UK it is more important than ever that we remain the strong anti-austerity voice and work within our communities to help each other in trying times.

On reflection, the 22nd European Green Party Council taught me much about how our Green Family are faring across Europe. We are so unique to have this tight network of enlightened minds, dedicated to the green vision and the philosophical basis of our parties. As we approach an impending European referendum, as Greens of England and Wales we should grasp onto this network, share resources and garner support in these fractious upcoming times.

Customary First Post.

I like blogging. It's cathartic. It's empowering. It's both public and private and in a world when our thoughts are more cramped than ever, it's important.

I've been blogging about music and culture for years, however this is a space for musings of a more political persuasion, if you're down with that.

So, welcome.

E x